Fitch affirms Spectrum Power

Fitch Ratings said it affirmed Spectrum Power Generation Ltd.'s national long-term rating at BB-(ind) with a stable outlook and its Rs. 1.776 billion of preferred stock at B(ind).

The ratings reflect continued deterioration in operating performance over FY10-FY11 due to low recoveries of fixed charge from Andhra Pradesh Transmission Corp. Ltd. because of the ongoing tariff dispute, the agency said. This has made it difficult for the company to break even at the profit before tax level.

The ratings are constrained by the increase in Spectrum Power's maintenance costs and the decline in its plant load factor in FY11 to 81% from 87% in FY10, the agency added.

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